FATCA Reporting. Initiative summary. March 2015

Transcription

1 FATCA Reporting Initiative summary March 2015

2 Who is Fundsquare? A market utility built by and for the Fund Industry Started in 2010, the Fund Market Infrastructure project has been piloted by a Super User Group composed of transfer agents, distributors and asset managers, representing 70% of the cross-border distributed fund in Luxembourg. Fundsquare is a Fund Infrastructure solution to provides management and dissemination of fund information and to capture large order flows and become a market standard COMPANY PARTNERS Fundsquare is a wholly-owned subsidiary of the Luxembourg Stock Exchange and is the combination of Finesti expertise and services with newly-created order routing services. Partner with SWIFT, who provides the backbone of the Fundsquare platform, and Altus, who provides the front end of the platform. 2

3 Why Fundsquare services? To drive further automation, standardization and economies of scale Information and Regulatory services Different collection point for many different types of fund data and documents Collection through not standardized tools and multi-formats Multiple transmissions of the same data, challenge to reconciliation and quality check Exponential cost in data administration, Order Management Services Increased operational complexity linked to Crossborder distribution of Funds Growing concerns of actors regarding costs, inefficiencies, redundant systems, disparate processes and lack of standardization Real-time access to all market participants and fund industry professionals 3

4 The Fundsquare Services REGULATORY Fundsquare hub, a single point of contact to support X-border distribution compliance A secure communication channel between funds and financial supervisory authorities for filing data, documents and encrypted regulatory reports to optimize fund registration obligations and needs. INFORMATION Collection, management and dissemination of fund information through standardised tools and highly automated processes. Control and monitoring allows tracking of data reception and provides statistics on activities and volumes (Dashboards, reporting, Key performance indicators) White labelling solution, includes the integration on your website of a data engine enabling a fund to provide investor access to all documentation stored on a single centralised repository. ORDER MANAGEMENT Order routing platform, a reliable and scalable solution that facilitates connections and order routing between distributors and funds. Real-time order routing from fund distributors to fund/transfer agents. Real-time order and confirmation notifications from fund/transfer agents to distributors. Real-time reporting and communications from fund/transfer agents to distributors. 4

5 Fundsquare provides FATCA reporting transmission solution Fundsquare E-file platform is today the leading platform for transmitting regulatory reporting Fundsquare has been appointed as an official channel for secure transmission between Luxembourg financial institutions and the Luxembourg tax administration (ACD) to transmit FATCA reporting This solution is the first step towards the implementation of the CRS (Common Reporting Standard) involving all members of OECD countries 5

6 Model and volumes 10,000 potential ReportingFI having to send FATCA reports to the ACD Filing entities => currently 7500 already referenced in Luxembourg There should be a lot of consolidation within filing entities performing reporting on behalf of reporting entities The main filing entity and service provider such as Management Companies and service providers (big 4, Lawyers, Fund administration, Management Company, TA, ) are already connected to our platform Managing relations between the filling entities/depositor, ReportingFI and their codifications (GIIN & CCSS codes) have been taken into account in our onboarding process which will be detailed in another document. 6

7 Product features 1. Web forms Area Short description Entry screens and forms are available in E-file enabling users to upload or complete manually the FATCA reporting and submit it to ACD Direct deposits are not allowed by the ACD via the portal 2. Sending Service 3. Encryption The Sending Service is our solution for automatically transmitting reporting to the authorities. This tool is compatible with most of the current operating systems (Windows / Unix / Linux) and is usually installed on a server on your side. With an easy network mapping, users can then simply copy the file to be sent in the appropriate directory. The file is then automatically encrypted and sent. Transmission via efile platform will be encrypted and authentication are done via a LuxTrust certificate. The terms of public key management for the authority are based on our already existing models. 4. Acknowledgments Management of feedbacks - technical and business - from the ACD have been implemented in our GUI and sending service based on our existing models. A feedback from the IRS (US tax administration) is out of scope. 5. XML reporting 6. Naming convention for files 7. Common codification 8. Zero reporting management The official message is XML FATCA (IRS Standard) and is used with some additional data "header" & locals rules (only one GIIN by reporting, ) defined by the administration => analysis available in our Q&A available online. A naming convention has been defined with the ACD in order to track (via a dashboard) all automatic transmissions, ensure completeness of controls and identification of filling and reporting entities. ReportingFI use GIIN identification numbers (IRS code) Filling entities / Depositor use official serial number codes defined by ACD ( CCSS code - Common Center of Social Security) Ability to transmit quickly an empty reporting => only the header will be mandatory but the body of the report will be optional. 9. Dashboard User friendly dashboard for filling entities / depositor via E-file 7

8 Timeline and Milestones January 2015 Testing of flows of XML files Mid-March 2015 Full solution tested with ACD September 2015 First reporting of the ACD to the IRS April 2015 Test platform open Start date decided by ACD End of May 2015 Production platform open Start date decided by ACD End of June, 2015 First reporting to the ACD 8

9 Pricing model An annual fee for filling entities as a new reporting module based on our current reporting pricing model 1st E-file reporting module nd module 700 3rd module 600 Above 3 modules 500 A fee based on the volume of ReportingFI for the FATCA reporting transmission 100 by ReportingFI per reporting period Example: A filling entity is filing FATCA reports for 25 ReportingFI, FATCA module is the 2 nd e-file module subscribed Cost = (25 x 100 ) = per year 9